Timeshare is an investment that provides the owner the right to use property (or properties) for a set period of time. This can be a holiday villa, apartment, condominium or cabin.
Owners were usually approached by sales representatives. They were offered free gifts in exchange for attending a presentation. During these presentations, high-pressure sales techniques are sometimes used to entice you to sign up on the spot. Timeshares are sold in Australia and in other countries. All require a long-term commitment.
Before you attend a timeshare presentation, here are the things you need to know that will help you ask pertinent questions. It’s good to be equipped with knowledge before signing the dotted line.
How it Works
- There are two types of timeshare schemes: specific time period schemes, and points-based schemes.
- Specific time period scheme – This allows the use of a specific property at a given period of time, usually one week per year.
- The points-based scheme – This requires buying of points or credits that you can use at a selection of destinations in several locations.
- The price of a timeshare scheme depends on the desired length of the holiday period or points purchased. It is also affected by the location and type of available accommodation. With a points-based scheme, your available points determine the length of vacation you can take, the period you can use them, the location and type of accommodation you can get. Peak season, such as school holidays and long vacations, require more points compared to lean seasons.
- If you have already bought a timeshare and cannot use it within the specified period, you can rent it out to others. You can also exchange your timeshare through timeshare websites.
- Timeshare is a managed fund. The operator must be a licensed Australian Financial Services provider. Before you buy a timeshare, make sure that the company is legitimate.
- Aside from the purchase price, which is usually paid in a lump sum, you will pay a maintenance fee and sometimes, a membership fee, annually. You will continue paying this fee for as long as you own the timeshare, whether you use it or not.
When you attend the timeshare presentation, remember that you don’t have to sign the contract on the day itself, no matter how insistent they are. And, should you decide to sign it, you have the right to a 7-day cooling-off period after signing, in case you change your mind.
If the company is not a member of the Australian Timeshare and Holiday Ownership Council (ATHOC), the cooling-off period is 14 days. As always, read everything including the fine print before you sign the dotted line. If you change your mind about buying, put your intent in writing before the cooling-off period is over.
Selling Your Timeshare
You are now a proud timeshare owner and have enjoyed being one for many years. You have gone to many memorable vacations with your family and friends. There might come a time when you can no longer use your timeshare. Remember that even if you’re not using it, you still have to pay for the annual fees. If this arrangement is not acceptable to you, you can exit timeshare whenever you want. Selling a timeshare is hard, but doable if you temper your expectations.
- Do not expect to make a profit – There are a lot of timeshares in the market but not a lot of buyers. Should you be lucky to find one, be ready to sell at a bargain. Yes, you will not recover your investment, but unloading the timeshare despite a loss means you can stop paying the annual fees.
- Market it creatively – Timeshare companies spend money on advertising. If you are going to compete with them, you have to be innovative in selling yours.